Heidi, the Melbourne-based AI health startup, is reducing its global workforce by about 18%, a move announced just six weeks after raising $475 million in funding. The company also confirmed that two of its three co-founders, Waleed Mussa and Yu Liu, will leave their roles. CEO Dr. Thomas Kelly revealed the restructuring in a LinkedIn post on Wednesday, admitting the company had misaligned its investment priorities despite strong growth.
The decision follows an internal review that identified inefficiencies in team structure and market focus. Kelly told staff the changes were essential to support Heidi’s expansion plans, which now involve managing three million patient interactions weekly. The restructuring includes merging customer support and research and development teams, along with reassigning responsibility for new product initiatives.
The $475 million funding round, announced in September, included a $100 million Series C led by Blackbird, bringing Heidi’s valuation to AU$1.26 billion. A separate $240 million investment from General Catalyst’s Customer Value Fund was designated for customer acquisition. These funds came after Heidi was named Startup of the Year and AI Innovator at the Startup Daily awards.
Kelly apologized to employees affected by the cuts, noting that Heidi employs over 600 people globally. This means approximately 108 roles will be eliminated. Departing employees will receive severance packages exceeding local legal requirements, along with additional benefits support.
Mussa and Liu, who co-founded Heidi with Kelly in 2019, will step down for personal and strategic reasons. Mussa will spend time with his family before transitioning out, while Liu will stay on as an advisor until March 2027, focusing on models and hardware. Kelly highlighted their contributions over nearly a decade, beginning when Mussa hired him in 2015 at a medical exam prep business.
Heidi’s restructuring aligns with broader workforce reductions in Australia’s tech industry. Canva, another major Melbourne company, announced simultaneous layoffs affecting 22% of its workforce, or roughly 1,270 employees. These moves reflect startups’ efforts to balance growth with operational efficiency as they scale.
Leadership’s Rationale for Workforce Reductions
“You’ve put your talent, time and belief into Heidi, and as a leadership team, we take responsibility for the decisions that have brought us here.”
